Refocus on the main industry of energy pipes and maintain the rating of "increasing holdings"
March 17, the company released the annual report, 21 years to achieve revenue of 4.23 billion yuan (yoy+7.2%); return to the mother net profit of 136 million yuan (yoy+9.9%), lower than our previous forecast of 316 million yuan (2021.8.20), mainly because 21H2 raw materials still maintain a high level and export tax rebate policy cancelled; deduction of non-return net profit of 41 million yuan (yoy-49.0%), non-recurrent profit and loss mainly for hospital performance compensation. Taking into account the 22-year decline in raw material prices and the company's refocus on energy pipe, profitability or recovery, we estimate that the EPS in 22-24 is 0.36 yuan 0.47max 0.53 yuan (previous value 0.34 pound 0.48 pound-yuan, diluted), comparable company PE (2022E) average 10.8X, taking into account the company's energy pipe technical strength, give the company 22 years 13 times PE valuation, corresponding to the target price 4.68 yuan (previous value 4.76 yuan) Maintain the "overweight" rating.
Hospital assets were successfully sold, returning to the main business of energy pipe, with an overall production capacity of 1 million tons according to the company's annual report, the company sold its relevant hospital assets in 21 years, refocused on the main business of energy pipe, and was no longer included in the scope of the company's consolidated statement in 21Q2; in addition, according to the company announcement (2021-046and the annual report, the equity price of the relevant assets was 920 million yuan, and the company had received 500 million yuan by the time the annual report was disclosed. In terms of energy pipes, the company's PQF production line was put into trial operation in June 2021, with an overall production capacity of 1 million tons and pipe production and sales of 53.0,505000 tons (yoy+22%, + 17%) in 21 years. In addition, the company's pipe products continue to make breakthroughs in the non-API market, and trade pot tubes and HRSG pipes have achieved the best results in history in 21 years; completed the delivery of the first batch of serpentine high-rise pipes, successfully entered the field of high-pressure oil pipes, and developed 38 new customers in the year.
The impact of policies such as the cancellation of export tax rebate has gradually faded, profitability may be expected, according to the company's annual report, the company's 21-year pipe unit gross profit of 658 yuan / ton (yoy-704 yuan / ton), gross profit margin 8.1% (yoy-9.0pct), mainly due to the 21-year sharp rise in raw material prices and price side transmission is not smooth or lag (the company is mainly direct sales), as well as steel export tax rebate policy cancelled and other factors, according to the announcement (2022-002) Most overseas customers have accepted the price adjustment and profitability has gradually returned to the level before the abolition of the tax rebate policy. In 21 years, the company's gross sales margin was 8.6% (yoy-9.2pct), and the expense rate during the period was 7.1% (yoy-1.8pct), of which the financial expenses turned negative compared with the same period last year, mainly due to increased interest income and reduced exchange losses, and deducted 1.0% of the non-return net interest rate (yoy-1.1pct). In addition, the company plans to pay a dividend of 0.8 yuan (including share buybacks) for every 10 shares in 21 years, with a dividend rate of 52.4%.
Pipe profits are expected to pick up and maintain the "overweight" rating.
The company sells hospital assets and refocuses on the main business of energy pipes. With the sharp rise in raw materials in the past 21 years, export tax rebates and other factors gradually fade, we expect the company may usher in a better situation. We estimate that the EPS for 22-24 is 0.36, 0.47, 0.53 yuan, which is comparable to the company's average PE (2022E) 10.8X. Considering the company's refocus on the main energy pipe industry and strong technical strength in this area, we give the company 13 times PE valuation in 22 years, corresponding to the target price of 4.68 yuan, and maintain the "overweight" rating.
Risk hint: macroeconomic is not as expected, downstream demand is not as expected, and industry policy has changed.
